The FHA and the Department of Housing and Urban Development have already slipped into somewhat of a “power save” mode since substantial parts of the federal government were shut down early this week. The FHA will continue to endorse new loans under what it calls a “multi-year appropriation authority.” FHA Commissioner Carol Galante said the agency will continue to guarantee single-family loans during the shutdown, refuting earlier news accounts that were based on erroneous materials included in HUD’s shutdown contingency plan. “I do want to clear up any confusion about what this means for FHA single-family home borrowers. FHA will be able to endorse single-family loans during the shutdown,” Galante said. “A very limited number of staff will be available to endorse new loans.” Galante warned...

The home-equity market has been down so long it doesn’t take much to make it look like it’s looking up. Firming house prices in 2013 may be leading to a revival. The outstanding balance of home-equity loans, including home-equity lines of credit and closed-end second mortgages, continued to decline during the second quarter, dropping another 2.3 percent, according to the Federal Reserve. Since the end of 2007, the home-equity market has shrunk by 35.5 percent. Depository institutions hold...[Includes three data charts]

The Federal Reserve’s relentless acquisition of agency MBS has been the biggest factor in the changing complexion of the MBS investor picture, far outstripping the tortoise-like pace at which the market has expanded this year. The Fed increased its agency MBS holdings by 12.8 percent during the second quarter of 2013, according to a new Inside MBS & ABS profile of investor classes in the mortgage securities market. The central bank added $137.2 billion to its agency MBS holdings during the quarter, and its gross acquisitions totaled $466.6 billion since the beginning of the year. That represented...[Includes two data charts]

Top officials in the Federal Reserve System were making the rounds of the financial and economic intelligentsia this week, shedding some light on the central bank’s decision to prolong its support of the financial and housing markets through its admittedly “unconventional means” of massive asset purchases, accommodative monetary policy and explicit forward guidance. “Several questions have emerged following the meeting” of the Federal Open Market Committee, said FOMC member William Dudley, president and chief executive officer of the Federal Reserve Bank of New York, during a speech this week in New York City. “Most noteworthy was – given that market expectations were skewed towards anticipating the beginning of a taper at this meeting – why the committee did not begin to reduce the pace of asset purchases.” Although he was not presuming to speak for the committee, Dudley did provide...

Despite recovering house values in most markets, insufficient collateral remained the biggest obstacle for consumers trying to get mortgage financing in 2012, according to a new Inside Mortgage Trends analysis of Home Mortgage Disclosure Act data. In virtually every category of the market, loan applicants were more successful in getting approved for a mortgage last year than they were back in 2011, the HMDA data show. Some 15.5 percent of loan applicants were turned down last year ... [Includes one data chart]

Borrowers or loan officers misreporting income on loan applications at the height of the housing boom may have pushed up the default rate of high-income borrowers, according to a new Federal Reserve analysis of Home Mortgage Disclosure Data that was matched with non-HMDA credit data. Researchers Neil Bhutta and Glenn Canner of the Fed’s Division of Research and Statistics found that many borrowers classified as high-income may actually have had lower incomes than what they stated on applications, and ...

If mortgage lenders don’t have enough to worry about with six new major mortgage rules from the Consumer Financial Protection Bureau that all take effect in January, they also face a heavier Home Mortgage Disclosure Act reporting burden and perhaps a greater litigation threat from some developments at the bureau. Last week, as the Federal Financial Institutions Examination Council was releasing the 2012 HMDA data, the CFPB came out with a set of online HMDA tools to enable consumers to explore mortgage application and loan data at a local level. “Just as the real estate motto ‘location, location, location’ was...

Rates for non-agency MBS and consumer ABS are expected to trend lower after the Federal Open Market Committee pulled a fast one on Wall Street this week by contradicting an expected “tapering” of its asset purchase program. Instead, the nation’s central bank announced it was continuing its ongoing purchases of $40 billion worth of agency MBS per month and $45 billion in longer-term Treasury securities. Prior to the FOMC’s meeting this week, the consensus view was that the Federal Reserve would pare monthly purchases of Treasury bonds by $10 billion and agency MBS by $5 billion beginning in October, according to analyst Isaac Boltansky at Compass Point Research & Trading LLC. “The housing sector has been...

Lenders and issuers already comply with most of the requirements in the recently re-proposed rule on risk retention as well as the disclosure standards under the proposed revision to Regulation AB, according to a former Treasury Department official. Darius Kingsley, currently a managing director and co-general counsel at JPMorgan Chase and former chief of Treasury’s homeownership preservation office, said the risk-retention rule will likely prompt increased issuance of non-agency MBS. “I think it’s...

Real estate investment trusts that focus on investing in residential MBS continued to see declines in their portfolios during the second quarter, but their earnings outlook may have improved somewhat this week, analysts say. Residential mortgage REITs held a combined $327.3 billion of single-family MBS as of the end of the second quarter, according to a new market analysis by Inside MBS & ABS. That was down 5.4 percent from the previous quarter, and it was the third straight quarterly decline since REIT MBS holdings reached a high of $374.2 billion in September 2012. REIT MBS holdings are...[Includes one data chart]